Colonial Motor Company says its heavy truck division Southpac Trucks is “performing well” despite a subdued heavy vehicle market, as the group posted a 50% lift in half-year profit.
The NZX-listed company reported a trading profit after tax of $10.4 million for the six months to December 31. It also declared an unchanged, fully imputed interim dividend of 15 cents per share, payable on March 30.
Chair Ash Waugh says the heavy commercial truck sectors in which Southpac Trucks operates “remained subdued”, with national volumes well down on the prior year. A recovery in that market is not expected to gain marked momentum in the short term, although the company remains confident conditions will improve alongside the wider economy.
Southpac Trucks also expanded its parts and service network, establishing two new ‘Truck Related Parts’ stores in Nelson and Dunedin to support local service dealers and large fleet customers.
Meanwhile, improved agricultural conditions have supported the group’s tractor operations. A positive dairy outlook and stronger returns, along with improved demand in the red meat sector, contributed to a solid recovery in the company’s tractor business, which remains highly competitive.
During the period, Agricentre South sold its Kubota business in November, including the North Road property in Invercargill, to focus on its core New Holland and Case IH heavy tractor franchises.
Waugh says the overall result was “appreciably better” than anticipated at the time of the company’s annual meeting in November, with strong new and used vehicle sales lifting December trading and providing a further boost to the half-year outcome.
The gradual recovery in the new light vehicle market mirrored broader economic conditions and was reflected in the company’s performance. However, erratic vehicle supply and demand remain an ongoing hurdle, which could be compounded by several vehicle model changes expected during 2026.
Management’s renewed focus on used vehicles across the group’s dealerships was a significant contributor to the better-than-expected half-year result.
In Christchurch, Hutchinson Motors opened a new leased facility on Detroit Place, replacing its previous inner-city site on St Asaph Street. Trading under the banner ‘Team Hutchinson All Makes’, the new site is expected to increase capacity for used vehicles and new vehicle preparation.
Looking ahead, Waugh says maintaining the first-half trajectory “may not be a realistic prospect”, but the objective remains to retain or build on recent gains.
New vehicle registrations in January were 8.9% higher than in January last year, which he says could support further improvement if economic growth continues.
However, headwinds in the heavy commercial truck sector are expected to persist into the second half, while disruption from new vehicle model changes and a weak New Zealand dollar also have the potential to affect trading results.
